The acquisition will enlarge GroSolar's presence in California, bolstering its efforts to be a national player in residential solar installations. Currently, the industry is largely made up of local installation companies.

GroSolar, which operates in 12 states and Canada, will add Silicon Valley, Berkeley, Sonoma, Orange County, San Diego, and Massachusetts with the Borrego Solar acquisition.

The company's acquisition comes at a time when the industry is poised to reap the benefits of solar tax credits receiving an eight-year extension as part of the federal stimulus bill.

"Dealers in GroSolar's existing distribution network will see immediate benefit, as we roll out additional best practices to serve our local installers, launch new programs to give homeowners easy access to solar power, and expand the largest distribution warehouse network in the industry and in California," Jeff Wolfe, GroSolar CEO, said in a statement.

Borrego Solar Systems plans to focus on its commercial and government business, following the acquisition. Terms of the deal were not disclosed.